A new research conducted by cryptocurrency exchange Bitmex and an analytics resource TokenAnalyst collaborated to publish a report on Ethereum and its relation to Initial Coin Offerings.
The research was compiled after the researchers carried out a study on amount of Ethereum raised and the US$ value of the gains and losses caused by changes in the Ethereum price, for each project. The study found that although Ethereum price fell recently, most projects were safe from danger as they had almost sold all the Ethereum they had raised.
Earlier in 2018, Ethereum was trading at $1,400 and with its fall in value, there were some fears that the projects that had raised a nice tidy sum of Ethereum, would be in a rush to panic sell their bags.
However, that was not the case. BitMex said, “Our analysis, along with the team from TokenAnalyst, shows that on a macro level, the above theory may not be applicable. Of the 222 projects which we looked at, they raised US$5.5 billion worth of Ethereum and they may have already sold almost exactly the same amount (just US$11 million less). These ICOs currently hold 3.8 million Ethereum, around 25% of the Ethereum they originally raised. However, in US$ terms, these projects have essentially already sold the same amount of Ethereum which they originally raised, leaving them a nice holding of US$830m of Ethereum.”
Of the 222 projects analysed, some of them include Bancor Protocol, Tezos, EOS, Basic Attention Token (BAT), among others. However, EOS was an exception in the study. This is chiefly because, the project raised almost 70% of the total Ethereum raised by other projects.
The study reports, “The figures are somewhat skewed by the EOS project, which remarkably raised around 70% of the Ethereum (by US$ value) of all the projects on our list, if our estimates are correct. However, even excluding EOS, the overall picture remains similar to what we described above, with projects selling almost the same in US$ terms as the amount they originally raised.”
It elaborated on its earlier point that, most projects had already sold the Ethereum they had raised. It stated, “Despite the 85% reduction in the Ethereum price from its peak, the projects have realised gains of US$727 million due to profits from Ethereum have they already sold, often selling before the recent price crash. The 3.8m Ethereum still on the balance sheets of these projects may not have that much of an impact on the Ethereum price, as it represents a reasonably small proportion of the 102 million supply of Ethereum.”
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